April 14, 2022
In its latest report, the Social and Economic Impacts of Gambling in Massachusetts (SEIGMA) research team analyzed the economic effects on the gaming industry of the pandemic, which dealt a shock to many industries across the state, including casinos.
As is well-documented, social distancing efforts associated with the pandemic led to widespread shutdowns and staff reductions in the economy, particularly in the leisure and hospitality sector. As these effects were becoming clear in summer 2020, the SEIGMA team, led by research partner UMass Donahue, identified an important opportunity to track the nature and extent of pandemic-related shocks to casinos, their workforce and the related economic ecosystem.
Following a three-month period of total shutdown, the casinos reopened in July 2020. Since then, they have continued to operate amid a shifting landscape of regulations and limitations, including restrictions on capacity. Within that landscape, each casino adjusted its operations accordingly.
The report analyzed data from all three casinos between January 2020 and June 2021 in order to assess the impacts of the COVID-19 crisis on the casino industry.
Key findings include:
- Visitation levels at the casinos had not returned to pre-pandemic levels, although the patrons gambling at the casinos after reopening appear to spend more on average than pre-pandemic patrons, and thus bolstered gross gaming revenues.
- Staffing levels had recovered somewhat following substantial layoffs in the spring of 2020. While casino employment appears lower than prior to the pandemic, many casino employees who were laid off or furloughed as the casinos closed had been hired back, with most casino hires between April 2020 and June 2021 being “rehires.”
- While approximately three months of taxable revenue was lost because of the shutdown, the casinos continue to provide tax revenue and payments to their host and surrounding communities comparable to what they paid prior to the shutdown.
In addition to analyzing these high-level trends, the research team also examined the disparate impacts of the shutdown and recovery of the casinos. The COVID-19 recession proved to be the most unequal recession on record, with young people, low-wage workers, women and people of color bearing the brunt of job losses and reduction in hours. These impacts were no different within the casino industry in Massachusetts. Workers in the food and beverage, gaming and recreation, and hotel departments, which are areas with high concentrations of workers of color, were heavily impacted by the casino layoffs. Since the initial shutdown, many of these workers have returned to the casinos, but the loss of jobs and wages exposed these workers to broader elements of economic instability, the report states. Furthermore, the share of women in each casino’s workforce has been slow to recover as the facilities re-open and return to more typical operating levels.
“The leisure and hospitality industry was decimated by the COVID shutdowns and social distancing measures starting in 2020,” says Mark Melnik, director of the institute’s Economic & Public Policy Research (EPPR) group. “That said, the better-than-expected revenues for the Massachusetts casinos, as well as the continued payments to local communities, signal the casinos were able to weather a very difficult storm for the industry overall.”
“One of the great things about an ongoing economic impact project like this is that we have set up protocols to collect operating data, and when something like a global pandemic comes along, you’re well-positioned to analyze that data and really understand how the industry was affected on a pretty granular level,” says Tom Peake, the study’s project leader at EPPR. “Massachusetts expanded gambling largely because of their economic benefits, whether that’s jobs, revenue or industry spending. So it’s great to be able to analyze the data and help stakeholders understand how those benefits were affected by a major disruptive event like the COVID-19 pandemic.”
The Economic & Public Policy Research (EPPR) business group at the UMass Donahue Institute is a leading provider of applied research, helping clients make more informed decisions about strategic economic and public policy issues. EPPR produces in-depth economic impact and industry studies that help clients build credibility, gain visibility, educate constituents, plan economic development initiatives, and prioritize investments. www.donahue.umass.edu/EPPR
Established in 1971, the UMass Donahue Institute is a public service, research, and economic development arm of the University of Massachusetts. Our mission is to apply theory and innovation to solve real-world challenges and enable our clients to achieve their goals and aspirations. We serve clients in the public, non-profit, and private sectors in the Commonwealth and throughout the nation and the world. For more information: www.donahue.umass.edu.
The Social and Economic Impacts of Gambling in Massachusetts (SEIGMA) research team is led by Research Professor of Epidemiology Rachel Volberg.